In our response we:
Part 1: Examine what makes digital assets unique. This is not a taxonomic exercise but a technical one and is foundational to the entire Consultation Paper. We submit that if an entirely new class of property is to be created, it needs to adequately capture as far as possible the technical, economic and legal breadth of potential digital assets as they continue to evolve.
Part 2: Seek to formulate a description of digital assets from first principles. To avoid discussing in the abstract we describe digital assets in a manner which captures their economical, technological and legal substance and which is not derived from any perceived deficiencies in traditional property classes. From there, we build into the Consultation Paper. Our description captures additional categories of digital assets which have not been captured by the Consultation Paper, but which exist in the real world and/or are informed by our client experience.
Part 3: Assess five real-life use cases of digital assets. As an extension of Part 2, we examine five use cases to stress test the Consultation Paper’s new class of property to gauge if (and how) it fulfils its own purpose.
Part 4: Engage with the Law Commission’s test and provide a response to the key questions raised in the Consultation Paper.
Part 5: Propose several counter models which are not necessarily exclusive of the other and could be developed together and are based on traditional law. These are not intended to be antagonistic to the Consultation Paper’s formulation, but may be of use as a counter-approach given the significant economic and legal ramifications of a new property class.
Part 6: We examine real-world considerations and implications of the Consultation Paper’s new property class. These deal with potential regulatory arbitrage and conflicts of legal systems which may arise from breaking into the fertile earth of a new property class.